Teacher: Ms. Laing
Class: 9-11 Business Students
Pricing as a marketing
strategy
Pricing as a marketing
strategy involves any
pricing policy by a firm
to gain market attention.
Pricing as a marketing strategy
It Involves:
Penetration pricing
Price lining
Price discrimination
Loss leading
Skimming and Creaming
Dumping
Psychological pricing
Penetration pricing
A new firm entering the
market may price its product
below that of its competitors.
Example
Loan agencies setting interest
rates lower than that of its
competitors.
Price lining
This involves a seller
who identifies different
segments of a market
and prices the product
to match each segment.
Example
Toyota sells Corolla and Prado motor
cars, they are priced differently and are
intended for consumers with different
income level.
Price discrimination
prices vary between
customers and markets
Example
some airlines and train
companies sell cheaper
tickets during off
season. (winter)
Loss leading
Firms use special offers or
discounts in order to
attract new customers.
They may sell below cost
or accept a low profit.
Example
Khemlani Mart always
offering attractive
discounts.
Skimming and Creaming
This involves selling a new
product at a high price because
some customers are anxious to
have it. The price usually falls
when competitors enters the
market.
Example
Cable & Wireless selling
phones and setting phone
bills at high cost until
Digicel was introduced to
customers.
Dumping
Products may be sold
below cost or at a lost
just to obtain some
income from them.
Example
A closing down sale
Psychological pricing
Since consumers matches
quality with high price
some marketers price
products highly to appeal
to this type of customers.
Example
Name Brand clothing.
( Gucci, Prada, Guess)
Pricing as a marketing activity
Pricing as a marketing activity
relates to the setting of prices by
producers. Generally they will
try to ensure that the price is
higher than the cost of
producing the product to ensure
profitability.
Example
The cost to produce a pen is $100.
in order to make a profit you
would add a percentage to the
production cost.
production cost is $100 plus 10%
= $10. Therefore $100+$10=$110.
THE END